Congo province poised to start certified 'conflict-free' tin exports

In this 2004 file photo, under tight security, a Congolese miner in the jungle town of Mubi bags raw chunks of cassiterite, the base element of tin REUTERS/Finbarr O'Reilly

* Dodd Frank law obliges firms to ensure no conflict minerals

* ITRI tin industry body has started certification scheme in Congo

* First certified minerals exports due from North Kivu province

* Campaigners say scheme will require constant verification

By Peter Jones

GOMA, Democratic Republic of Congo, April 19 (Reuters) - Democratic Republic of Congo's tin producing North Kivu province may begin exports of certified 'conflict-free' minerals as soon as next week after the roll-out of a new barcode tagging scheme, the head of the regional division of mines said.

North Kivu is at the heart of Congo's production of tin and coltan - used in electronic devices such as mobile phones and video game consoles. Various armed groups have funded their operations for years by smuggling ore and taxing artisal miners.

In an effort to halt the violence, the United States included a provision in the 2010 Dodd-Frank act obliging U.S.-listed companies to ensure their supply chain was free from Congolese conflict minerals, specifically gold, coltan, tin and tungsten - a hard metal used in filaments, tools and weaponry.

Congo imposed a six-month ban on mining in North Kivu in late 2010 and then, in early 2012, forbade mineral exports unless they could be proven to come from conflict-free zones. Congo's tin output slumped from 7,800 tonnes in 2009 to 2,900 two years later, according to the U.S. Geological Survey.

The new certification scheme organised by the tin industry body ITRI, which was rolled out in North Kivu in early March, aims to revive production by classifying mines according to a 'traffic-light' code - green for 'conflict free', yellow for unclear, and red for mines in violence-plagued zones.

Production from conflict-free mines are bagged and tagged with a barcode to make it easily traceable.

"We've validated 17 mining sites in North Kivu as green, meaning conflict free," said Emmanuel Ndimubanzi Ngoroba, head of Congo's division of mines in North Kivu. "Tagging has already begun. If all goes well, we expect the first exports next week."

COLLAPSE IN PRICES

Millions are estimated to have died in nearly two decades of bloodshed in eastern Congo, fuelled by the minerals smuggled through Rwanda, Uganda and Burundi. Even before the U.S. legislation took effect, big buyers like Apple Inc and Hewlett Packard stopped sourcing metals from the region.

During the suspension in exports, mineral prices collapsed. The only buyers were Chinese exporters, who were less troubled by traceability, and smugglers.

A pilot ITRI project started in Congo's copper-rich southeastern province of Katanga. It was then extended to South Kivu, where tagging began at the Nyabibwe mine in late 2012.

The scheme's expansion into North Kivu has been facilitated by the defeat in November of the M23 rebellion, which U.N. experts said was heavily involved in mineral smuggling.

Almost all North Kivu's tin production comes from artisanal mines - expect for the Bisie mine, run by Canada's Alphamin Resources - and campaigners hope the scheme will ease poverty for tens of thousands of miners.

"For many people, mining is their only source of income," said Ngoroba. "Exports have are indirect positive effects: parents can afford to send their children to school."

Local traders, who have stockpiled minerals since 2012 without a means to export them, say they are committed to keeping supply chains clean.

"If a mine classified as green turns orange or red, then we are obliged to disengage with that mine. We must do our own due diligence," said John Kanyoni, owner of Metachem trading in Goma, capital of North Kivu.

Some traders, including Metachem, have already filed their first due diligence reports in preparation for resuming exports.

"They're just the first reports: we can't expect them to be perfect," said Ngoroba. "The people in charge of due diligence at each of the trading houses still need to be fully trained."

The movement of armed groups in the province's forested hinterlands makes it difficult for inspection teams to ensure a site will not be overrun within weeks, or days, of a visit.

They say tagged loads could be contaminated with conflict minerals because agents at SAESSCAM, the agency representing artisanal miners, are poorly paid and vulnerable to corruption.

Even correct tagging does not prove conflict-free status because armed groups can tax loads on the way to the border, said Sophia Pickles of Global Witness, urging exporters to ensure scrutiny of the entire supply chain.

"International companies aren't looking for problems to be swept under the carpet," she said. "They're looking for responsible identification of problems and proof these have been addressed in order to ensure the integrity of the supply chain."

A U.S. appeals court on Monday struck down parts of the regulation forcing public companies to disclose if their products contain "conflict minerals" from Congo, saying it violates free speech rights.

But campaign groups said the court had upheld the broad thrust of the measures.

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